Crisostomo V.

CA
FACTS: A travel agency is not an entity engaged in the business of transporting
either passengers or goods and is therefore, neither a private nor a common carrier.
Respondent did not undertake to transport petitioner from one place to another
since its covenant with its customers is simply to make travel arrangements in their
behalf. Respondents services as a travel agency include procuring tickets and
facilitating travel permits or visas as well as booking customers for tours. It is in this
sense that the contract between the parties in this case was an ordinary one for
services and not one of carriage.

Petitioner Estela L. Crisostomo contracted the services of respondent Caravan Travel

and Tours International, Inc. to arrange and facilitate her booking, ticketing, and
accommodation in a tour dubbed Jewels of Europe. A 5% discount on the total
cost of P74,322.70 which included the airfare was given to the petitioner. The
booking fee was also waived because petitioners niece, Meriam Menor, was
respondents ticketing manager.

On June 12, 1991, Menor went to her aunts residence to deliver petitioners travel
documents and plane tickets. In return, petitioner gave the full payment for the
package tour. Menor then told her to be at the NAIA on Saturday, June 15, 1991, two
hours before her flight on board British Airways. Without checking her travel
documents, petitioner went to NAIA and to her dismay, she discovered that the
flight she was supposed to take had already departed the previous day. She learned
that her plane ticket was for the flight scheduled on June 14, 1991. She called up
Menor to complain and Menor suggested upon petitioner to take another tour
British Pageant. Petitioner was asked anew to pay US$785.00. Petitioner gave
respondent US$300 as partial payment and commenced the trip.
ISSUE: Whether or not respondent Caravan did not observe the standard of care
required of a common carrier when it informed the petitioner wrongly of the flight
schedule.

HELD: The petition was denied for lack of merit. The decision of the Court of
Appeals was affirmed.
A common carrier is defined under Article 1732 of the Civil Code as persons,
corporations, firms or associations engaged in the business of carrying or
transporting passengers or goods or both, by land, water or air, for compensation,
affecting their services to the public. It is obvious from the above definition that
respondent is not an entity engaged in the business of transporting either
passengers or goods and is therefore, neither a private nor a common carrier.
Respondent did not undertake to transport petitioner from one place to another
since its covenant with its customers is simply to make travel arrangements in their
behalf. Respondents services as a travel agency include procuring tickets and
facilitating travel permits or visas as well as booking customers for tours. It is in this
sense that the contract between the parties in this case was an ordinary one for
services and not one of carriage.

The standard of care required of respondent is that of a good father of a family

under Article 1173 of the Civil Code. This connotes reasonable care consistent with
that which an ordinarily prudent person would have observed when confronted with
a similar situation. It is clear that respondent performed its prestation under the
contract as well as everything else that was essential to book petitioner for the tour.
Had petitioner exercised due diligence in the conduct of her affairs, there would
have been no reason for her to miss the flight. Needless to say, after the travel
papers were delivered to petitioners, it became incumbent upon her to take
ordinary care of her concerns. This undoubtedly would require that she at least read
the documents in order to assure herself of the important details regarding the trip.

De Guzman v. CA
Facts:
Respondent Ernesto Cendana was a junk dealer. He buys scrap materials and brings
those that he gathered to Manila for resale using 2 six-wheeler trucks. On the return
trip to Pangasinan, respondent would load his vehicle with cargo which various
merchants wanted delivered, charging fee lower than the commercial rates.
Sometime in November 1970, petitioner Pedro de Guzman contracted with
respondent for the delivery of 750 cartons of Liberty Milk. On December 1, 1970,
respondent loaded the cargo. Only 150 boxes were delivered to petitioner because
the truck carrying the boxes was hijacked along the way. Petitioner commenced an
action claiming the value of the lost merchandise. Petitioner argues that
respondent, being a common carrier, is bound to exercise extraordinary diligence,
which it failed to do. Private respondent denied that he was a common carrier, and
so he could not be held liable for force majeure. The trial court ruled against the
respondent, but such was reversed by the Court of Appeals.
Issues:
(1) Whether or not private respondent is a common carrier
(2) Whether private respondent is liable for the loss of the goods
Held:
(1) Article 1732 makes no distinction between one whose principal business activity
is the carrying of persons or goods or both, and one who does such carrying only as
an ancillary activity. Article 1732 also carefully avoids making any distinction
between a person or enterprise offering transportation service on a regular or
scheduled basis and one offering such service on an occasional, episodic or
unscheduled basis. Neither does Article 1732 distinguish between a carrier offering
its services to the "general public," i.e., the general community or population, and
one who offers services or solicits business only from a narrow segment of the
general population. It appears to the Court that private respondent is properly
characterized as a common carrier even though he merely "back-hauled" goods for
other merchants from Manila to Pangasinan, although such backhauling was done
on a periodic or occasional rather than regular or scheduled manner, and even
though private respondent's principal occupation was not the carriage of goods for
others. There is no dispute that private respondent charged his customers a fee for
hauling their goods; that fee frequently fell below commercial freight rates is not

relevant here. A certificate of public convenience is not a requisite for the incurring
of liability under the Civil Code provisions governing common carriers.
(2) Article 1734 establishes the general rule that common carriers are responsible
for the loss, destruction or deterioration of the goods which they carry, "unless the
same is due to any of the following causes only:
a. Flood, storm, earthquake, lightning, or other natural disaster or calamity;
b. Act of the public enemy in war, whether international or civil;
c. Act or omission of the shipper or owner of the goods;
d. The character of the goods or defects in the packing or in the containers; and
e. Order or act of competent public authority."
The hijacking of the carrier's truck - does not fall within any of the five (5)
categories of exempting causes listed in Article 1734. Private respondent as
common carrier is presumed to have been at fault or to have acted negligently. This
presumption, however, may be overthrown by proof of extraordinary diligence on
the part of private respondent. We believe and so hold that the limits of the duty of
extraordinary diligence in the vigilance over the goods carried are reached where
the goods are lost as a result of a robbery which is attended by "grave or irresistible
threat, violence or force." we hold that the occurrence of the loss must reasonably
be regarded as quite beyond the control of the common carrier and properly
regarded as a fortuitous event. It is necessary to recall that even common carriers
are not made absolute insurers against all risks of travel and of transport of goods,
and are not held liable for acts or events which cannot be foreseen or are inevitable,
provided that they shall have complied with the rigorous standard of extraordinary
diligence.

First Philippine Industrial Corp. vs. CA

Facts:
Petitioner is a grantee of a pipeline concession under Republic Act No. 387.
Sometime in January 1995, petitioner applied for mayors permit in Batangas.
However, the Treasurer required petitioner to pay a local tax based on gross receipts
amounting to P956,076.04. In order not to hamper its operations, petitioner paid the
taxes for the first quarter of 1993 amounting to P239,019.01 under protest. On
January 20, 1994, petitioner filed a letter-protest to the City Treasurer, claiming that
it is exempt from local tax since it is engaged in transportation business. The
respondent City Treasurer denied the protest, thus, petitioner filed a complaint
before the Regional Trial Court of Batangas for tax refund. Respondents assert that
pipelines are not included in the term common carrier which refers solely to
ordinary carriers or motor vehicles. The trial court dismissed the complaint, and
such was affirmed by the Court of Appeals.
Issue:
Whether a pipeline business is included in the term common carrier so as to
entitle the petitioner to the exemption
Held:

Article 1732 of the Civil Code defines a "common carrier" as "any person,
corporation, firm or association engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air, for compensation, offering their
services to the public."
The test for determining whether a party is a common carrier of goods is:
(1) He must be engaged in the business of carrying goods for others as a public
employment, and must hold himself out as ready to engage in the transportation of
goods for person generally as a business and not as a casual occupation;
(2) He must undertake to carry goods of the kind to which his business is confined;

(3) He must undertake to carry by the method by which his business is conducted
and over his established roads; and
(4) The transportation must be for hire.
Based on the above definitions and requirements, there is no doubt that petitioner
is a common carrier. It is engaged in the business of transporting or carrying goods,
i.e. petroleum products, for hire as a public employment. It undertakes to carry for
all persons indifferently, that is, to all persons who choose to employ its services,
and transports the goods by land and for compensation. The fact that petitioner has
a limited clientele does not exclude it from the definition of a common carrier.

Malayan Insurance Co. V. Philippines First Insurance Co.

Calvo v. UCPB General Insurance

G.R. No. 148496 March 19, 2002
Facts: Petitioner Virgines Calvo, owner of Transorient Container Terminal Services,
Inc. (TCTSI), and a custom broker, entered into a contract with San Miguel
Corporation (SMC) for the transfer of 114 reels of semi-chemical fluting paper and
124 reels of kraft liner board from the port area to the Tabacalera Compound,
Ermita, Manila. The cargo was insured by respondent UCPB General Insurance Co.,
Inc.
On July 14, 1990, contained in 30 metal vans, arrived in Manila on board M/V
Hayakawa Maru. After 24 hours, they were unloaded from vessel to the custody of
the arrastre operator, Manila Port Services, Inc. From July 23 to 25, 1990, petitioner,
pursuant to her contract with SMC, withdrew the cargo from the arrastre operator
and delivered it to SMCs warehouse in Manila. On July 25, the goods were inspected
by Marine Cargo Surveyors, reported that 15 reels of the semi-chemical fluting
paper were wet/stained/torn and 3 reels of kraft liner board were also torn. The
damages cost P93,112.00.
SMC collected the said amount from respondent UCPB under its insurance contract.
Respondent on the other hand, as a subrogee of SMC, brought a suit against
petitioner in RTC, Makati City. On December 20, 1995, the RTC rendered judgment
finding petitioner liable for the damage to the shipment. The decision was affirmed
by the CA.

Issue: Whether or not Calvo is a common carrier?

Held: In this case the contention of the petitioner, that he is not a common carrier
but a private carrier, has no merit.
Article 1732 makes no distinction between one whose principal business activity is
the carrying of persons or goods or both, and one who does such carrying only as
ancillary activity. Article 1732 also carefully avoids making any distinction between
a person or enterprise offering transportation service on a regular or scheduled
basis and one offering such service on an occasional, episodic or unscheduled basis.
Neither does Article 1732 distinguish between a carrier offering its services to the
general public, i.e., the general community or population, and one who offers
services or solicits business only from a narrow segment of the general population.
We think that Article 1733 deliberately refrained from making such distinction. (De
Guzman v. CA, 68 SCRA 612)

The concept of common carrier under Article 1732 coincide with the notion of
public service, under the Public Service Act which partially supplements the law
on common carrier. Under Section 13, paragraph (b) of the Public Service Act, it
includes:
x x x every person that now or hereafter may own, operate, manage, or control in
the Philippines, for hire or compensation, with general or limited clientele, whether
permanent, occasional or accidental, and done for general business purposes, any
common carrier, railroad, street railway, traction railway, subway motor vehicle,
either for freight or passenger, or both, with or without fixed route and whatever
may be its classification, freight or carrier service of any class, express service,
steamboat, or steamship line, pontines, ferries and water craft, engaged in the
transportation of passengers or freight or both, shipyard, marine repair shop, wharf
or dock, ice plant, ice-refrigeration plant, canal, irrigation system, gas, electric light,
heat and power, water supply and power petroleum, sewerage system, wire or
wireless communications systems, wire or wireless broadcasting stations and other
similar public services. x x x

SPS. TEODORO AND NANETTE PERENA V. SPS. ZARATE

In June 1996, Nicolas and Teresita Zarate contracted Teodoro and Nanette Perea to
transport their (Zarates) son, Aaron Zarate, to and from school. The Pereas were
owners of a van being used for private school transport.
At about 6:45am of August 22, 1996, the driver of the said private van, Clemente
Alfaro, while the children were on board including Aaron, decided to take a short cut
in order to avoid traffic. The usual short cut was a railroad crossing of the Philippine
National Railway (PNR).
Alfaro saw that the barandilla (the pole used to block vehicles crossing the railway)
was up which means it was okay to cross. He then tried to overtake a bus. However,
there was in fact an oncoming train but Alfaro no longer saw the train as his view
was already blocked by the bus he was trying to overtake. The bus was able to cross
unscathed but the vans rear end was hit. During the collision, Aaron, was thrown off
the van. His body hit the railroad tracks and his head was severed. He was only 15
years old.

It turns out that Alfaro was not able to hear the train honking from 50 meters away
before the collision because the vans stereo was playing loudly.
The Zarates sued PNR and the Pereas (Alfaro became at-large). Their cause of
action against PNR was based on quasi-delict. Their cause of action against the
Pereas was based on breach of contract of common carriage.
In their defense, the Pereas invoked that as private carriers they were not
negligent in selecting Alfaro as their driver as they made sure that he had a drivers
license and that he was not involved in any accident prior to his being hired. In
short, they observed the diligence of a good father in selecting their employee.
PNR also disclaimed liability as they insist that the railroad crossing they placed
there was not meant for railroad crossing (really, thats their defense!).
The RTC ruled in favor of the Zarates. The Court of Appeals affirmed the RTC. In the
decision of the RTC and the CA, they awarded damages in favor of the Zarates for
the loss of earning capacity of their dead son.

The Pereas appealed. They argued that the award was improper as Aaron was
merely a high school student, hence, the award of such damages was merely
speculative. They cited the case of People vs Teehankee where the Supreme Court
did not award damages for the loss of earning capacity despite the fact that the
victim there was enrolled in a pilot school.
ISSUES: Whether or not the defense of due diligence of a good father by the Pereas
is untenable. Whether or not the award of damages for loss of income is proper.
HELD: Yes, in both issues.
Defense of Due Diligence of a Good Father
This defense is not tenable in this case. The Pereas are common carriers. They are
not merely private carriers. (Prior to this case, the status of private transport for
school services or school buses is not well settled as to whether or not they are
private or common carriers but they were generally regarded as private carriers).
Private transport for schools are common carriers. The Pereas, as the operators of
a school bus service were: (a) engaged in transporting passengers generally as a
business, not just as a casual occupation; (b) undertaking to carry passengers over
established roads by the method by which the business was conducted; and (c)
transporting students for a fee. Despite catering to a limited clientle, the Pereas
operated as a common carrier because they held themselves out as a ready
transportation indiscriminately to the students of a particular school living within or
near where they operated the service and for a fee.
Being a common carrier, what is required of the Pereas is not mere diligence of a
good father. What is specifically required from them by law is extraordinary
diligence a fact which they failed to prove in court. Verily, their obligation as
common carriers did not cease upon their exercise of diligently choosing Alfaro as
their employee.
(It is recommended that you read the full text, the Supreme Court made an
elaborate and extensive definition of common and private carriers as well as their
distinctions.)

Award of Damages for Aarons loss of earning capacity despite he being a high
school student at the time of his death
The award is proper. Aaron was enrolled in a reputable school (Don Bosco). He was
of normal health and was an able-bodied person. Further, the basis of the
computation of his earning capacity was not on what he would have become. It was
based on the current minimum wage. The minimum wage was validly used because
with his circumstances at the time of his death, it is most certain that had he lived,
he would at least be a minimum wage earner by the time he starts working. This is
not being speculative at all.
The Teehankee case was different because in that case, the reason why no damages
were awarded for loss of earning capacity was that the defendants there were
already assuming that the victim would indeed become a pilot hence, that made
the assumption speculative. But in the case of Aaron, there was no speculation as to
what he might be but whatever hell become, it is certain that he will at the least
be earning minimum wage.

MACONDARY V. COMMISSIONER OF CUSTOMS

On November 2, 1962, the vessel S/S TAI PING, of which petitioner is the local
agent, arrived at the port of Manila from San Francisco, California, U.S.A., conveying
various shipments of merchandise, among which was a shipment of one (1) coil
carbon steel, one (1 bundle carbon steel flat and one (1) carbon containing carbon
tool holders carbide cutters,
ground, all of which appeared in the Bill of Lading No. 22, consigned to Bogo
Medellin Millings Co., Inc. The shipment, except the one (1) coil carbon steel was
not reflected in the Inward Cargo Manifest as required by Section 1005 in relation to
Section 2521 of the Tariff and Custom Code of the Philippines. Allied Brokerage
Corporation, acting for and in behalf of Bogo Medellin Milling Co. requested
petitioner Macondray & Co., agent of the vessel S/S TAI PING, to correct the
manifest of the steamer so that it may take delivery of the goods at Customs House.
Collector of Custom required petitioner to explain and show cause why no
administrative fine should be imposed upon saidvessel. The fine of 1,000.00 was
paid by petitioner under protest. Hearing of the protest proceeded thereafter.

Collector of Customs of the Port of Manila ordered the dismissal of said protest for
lack of merit. On appeal to the Commissioner of Customs the latter sustained the
Collector of Customs. Petitioner filed a petition for review with the Court of Tax
Appeals. The CTA affirmed the decision of the Collector of Customs as affirmed by
the Commissioner of Customs.
ISSUE:
Whether or not the Collector of Customs erred in imposing a fine on vessel, S/S TAI
PING, for alleged violation of Section 1005 in relation to Section 2521 of the Tariff
and Customs Code for landing unmanifested cargo at the port of Manila.
HELD:
The inclusion of the unmanifested cargoes in the Bill of Lading does not satisfy the
requirement of the aforequoted sections of the Tariff and Customs Code. It is to be

noted that nowhere in the said sections is the presentation of a Bill of Lading
required required, but only the presentation of a Manifest containing a true and
accurate description of the cargoes. This is for the simple reason that while a
manifest is a declaration of the entire cargo, a bill of lading is but a declaration of a
specific part of the cargo and is a matter of business convenience based exclusively
on a contract. The Court cannot accept or place an implied imprimatur on the
contention of petitioner that the entries in the bill of lading adequately supplied the
deficiency of the manifest and cured its infirmity. The mandate of the law is clear
and Court cannot settle for less. The law imposes the absolute obligation, under
penalty for failure, upon every vessel from a foreign port to have on board complete
written or typewritten manifests of all her cargo, signed by the master. Where the
law requires a manifest to be kept or delivered, it is not complied with unless the
manifest is true and accurate.
Amendment of cargo manifest even if later approved by customs authorities does
not relieve carrying vessel of liability of fine incurred prior to its correction. The
philosophy and purpose behind the law authorizing amendment, under paragraph 3
of Section 1005 of the Tariff and Customs Code, is to protect innocent importers or
consignees from the mistake or unlawful acts of the master.

DISTINCTIONS BETWEEN A BILL OF LADING AND A

CARGO MANIFEST
Manifest is a declaration of the entire cargo Bill of Lading is but a declaration of a
specific part of the cargo and is a matter of business convenience based exclusively
on a contract.
The object of a manifest is to:
- Furnish the customs officers with a list to check against; - Inform our revenue
officers what goods are being brought into the country; and - Provide a safeguard
against goods being brought into this country on a vessel and then smuggled
ashore.
While a Bill of Lading is ordinarily merely a convenient commercial instrument
designed to protect the importer or consignee, a manifest of the cargo is absolutely
essential to the exportation or importation of property in all vessels, the evident
intent and object of which is to impose upon the owners and officers of such vessel
an imperative obligation to submit lists of the entire loading of the ship in the
prescribed form, to facilitate the labors of the customs and immigration officers and
to defeat any attempt to make use of such vessels to secure the unlawful entry of
persons or things into the country.

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